1. National Conference on Public Employee Retirement Systems: National Research Findings from a Survey of 500 Small Business Owners Nationwide

2. Methodology Lake Research Partners and The Tarrance Group designed and administered this survey that was conducted by telephone using professional interviewers September 14-22, 2011. The survey reached a total of 500 small business owners nationwide. The size of businesses ranged from 2 to 49 employees. Telephone numbers for the sample were generated from a national database of small businesses maintained by Info U.S. The data were weighted slightly by age, gender, number of employees, region, and minority owned status. The margin of error for the total sample is ±4.4 percentage points. The error for sub-groups is greater. Questions marked with an * were asked of half the sample.

3. 3 Key Points From the outset small businesses owners overwhelmingly support the concept of the Secure Choice Pension, a new retirement plan modeled on the public pension system that would offer a guaranteed monthly pension benefit. Eight-out-of-ten owners are in favor of the proposal (82% favor; 15% opposed ). Nearly seven-out-of-ten owners (69%) are interested in the Secure Choice Pension for their own businesses, including a solid majority (59%) of small business owners who do not currently provide any retirement benefits to their employees.

4. 4 Key Points Small business owners are acutely aware of the need for better options for retirement savings. A solid majority (56%) worry about their own retirement security and nearly two-thirds (65%) worry that their employees will not have enough money to retire. Nearly all small business owners (82%) agree that offering a retirement benefit helps to recruit and retain good employees. Almost three-quarters of small business owners (73%) feel a responsibility to provide some kind of retirement benefit.

5. The Context Most small business owners surveyed offer some sort of retirement savings plan. Nevertheless, retirement security remains an elusive goal even for those who have or provide retirement benefits.

6. 6 A majority of all small business owners provide some type of retirement benefits as part of their compensation package. Most of these provide a 401(k) rather than a pension. Do you offer any sort of a retirement benefit to your employees, like a 401(k) or a pension? [IF YES] what type of retirement benefit do you offer? Is it a defined benefit plan, like a pension, a defined contribution plan, like a 401(k) or 403(b), or is it something else?

7. 7 The vast majority of small business owners offering a some type of a retirement plan say most or all of their employees receive these benefits. And roughly what proportion of your employees actually participates in the retirement plan? Is it all employees, most of them, about half, less than half, or only a few?

8. Small business owners in the manufacturing sector are most likely to provide retirement benefits to employees. However, the service sectors that have been replacing lost manufacturing jobs are less likely to offer these benefits. 8 Do you offer any sort of a retirement benefit to your employees, like a 401(k) or a pension? [IF YES] what type of retirement benefit do you offer? Is it a defined benefit plan, like a pension, a defined contribution plan, like a 401(k) or 403(b), or is it something else?

9. Revenue is the best predictor of participation. Small business owners generating less than $400,000 in revenues are much less likely to provide retirement benefits. 9 Do you offer any sort of a retirement benefit to your employees, like a 401(k) or a pension? [IF YES] what type of retirement benefit do you offer? Is it a defined benefit plan, like a pension, a defined contribution plan, like a 401(k) or 403(b), or is it something else?

10. 10 Although a majority of all small business owners worry about their personal retirement security, those not offering retirement benefits are more deeply concerned. In this economy, are you very worried, somewhat worried, not too worried, or not at all worried that you personally will not have enough money for a secure retirement? All Small Businesses No Retirement Benefits Retirement Benefits +7 +22 +12

11. 11 Small business owners also worry their employees will not have enough money for retirement. While this concern is greatest among owners who don’t offer retirement benefits, a majority of those who do are also worried. In this economy, are you very worried, somewhat worried, not too worried, or not at all worried that your employees will not have enough money for a secure retirement? All Small Businesses No Retirement Benefits Retirement Benefits +24 +41 +20

12. Attitudes Toward Retirement Benefits Most owners agree that providing retirement benefits is good for their business, employees, and feel responsible to provide them.

13. 13 Owners overwhelmingly agree that retirement benefits help recruit good employees, and that their employees want more secure and flexible options for retirement. Nearly three quarters feel a responsibility to provide retirement benefits. Now I am going to read you some reasons employers might want to offer retirement benefits to employees. For each one, please tell me if you agree or disagree with the statement. [Agree/Disagree] Net +68 +65 +53 +46 +29 +26 +1 -46

14. Business with revenues between $400,000 and $2 million are more likely to agree that providing retirement benefits falls under their responsibilities. 14 Now I am going to read you some reasons employers might want to offer retirement benefits to employees. Please tell me if you agree or disagree with the statement: “I feel a responsibility to provide some kind of retirement benefit”?

15. 15 Nearly three quarters of business owners disagree that their employees don’t need a retirement benefit. Almost two-thirds of businesses who don’t provide retirement benefits still agree that employees are in need of them. Now I am going to read you some reasons employers might want to offer retirement benefits to employees. Please tell me if you agree or disagree with the statement: “My employees don’t need a retirement benefit”? -57 -31 -47 All Small Business Owners No Benefits Benefits

16. Almost two-thirds of businesses who don’t offer any retirement options are very wary of the complications associated with administering a plan. 16 Now I am going to read you some reasons employers might want to offer retirement benefits to employees. Please tell me if you agree or disagree with the statement: “It would be nice to offer a retirement benefit, but it’s too complicated to administer”?

17. The Secure Choice Pension Proposal Small business owners overwhelmingly embrace the concept of the Secure Choice Pension, a new retirement plan modeled on the public employee pension system that would offer a guaranteed monthly pension benefit plan.

18. 18 Favor or Oppose Now I am going to read you different components of a proposal to allow private sector workers to participate in a pension plan similar to the ones public employees get. Please listen to the whole thing, then I'll ask for your opinion about it. Under this proposal, people who work for private companies would have the opportunity to participate in a Secure Choice Pension, a new retirement plan modeled after the public employee pension system, and receive a guaranteed monthly pension benefit, like many public employees do, when they retire. Unlike a 401(k), employees would receive a guaranteed pension benefit of at least the amount they put in over time, plus any investment return. Employers could choose to simply give access to their employees, or contribute to the plan, or both. Instead of an individual account, the contributions would go into a large fund managed by a team of experienced investment professionals and overseen by an administrative board. The board would include representatives from the existing public employee pension system, representatives of participating employers, and representatives of participating employees. Contributions would be tax deferred — meaning employees would pay no taxes on the money until they take it out. The Secure Choice Pension proposal language:

19. 19 Small business owners overwhelmingly support the Secure Choice Pension, regardless of whether or not they already provide a retirement benefit to their employees. Now, please tell me if you would favor or oppose this proposal having this type of retirement plan available for small private employers? [FAVOR/OPPOSE] Is that strongly or somewhat? All Small Business No Benefits Benefits +69+63 +67

20. 20 Although the vast majority of all owners support the Secure Choice Plan, owners of large businesses with over two million in revenue are slightly less supportive of the proposal than owners overall.

21. 21 Women-owned businesses and those in the retail/ restaurant sector are slightly less supportive of the proposal.

22. 22 Three out of four small business owners who provide retirement benefits are interested in the Secure Choice Pension for their own employees. A majority of those not providing benefits are also interested. And thinking about your own small business, would you be very interested, somewhat interested, not too interested, or not at all interested in this type of retirement plan for your own employees? All Small Business Owners No Benefits Benefits +49 +19 +38

23. David Mermin DMermin@lakeresearch.com Marie Frederickson MFrederickson@lakersearch.com Jeff Klinger JKlinger@lakeresearch.com Washington, DC | Berkeley, CA | New York, NY LakeResearch.com 202.776.9066 Brian Neinaber BNeinaber@tarrance.com Washington, DC Tarrance.com 703.684.6688